Coherent Corp — 2026Q2 earnings
reported 2026-05-06
EPS $1.41 vs $1.39 est — beat
next session -7.4% (close 2026-05-06 → 2026-05-07)
Source
Press release ↗Summary
Accelerating growth on AI-datacenter demand: revenue of $1.81 billion rose 21% (27% pro forma) with non-GAAP EPS of $1.41, and the fiscal Q4 guide of $1.91-2.05 billion sits above the quarter just reported at both ends. The call showed demand both intensifying and lengthening — a step-function increase in the order book drove backlog to a record with orders reaching into calendar 2028 and customer LTAs extending to the end of the decade — anchored by the March NVIDIA CPO partnership, a $2 billion equity investment plus a multiyear supply agreement. Capacity is the gating factor and the response is visible: the indium phosphide capacity doubling is running a quarter ahead of plan, and the NVIDIA investment doubled cash to $3 billion to fund the accelerating capex ramp.
Earnings call
Earnings call webcast ↗Review
From the report
Coherent's fiscal Q3 2026 (quarter ended March 31, 2026) showed accelerating growth on AI-datacenter demand: revenue of $1.81B rose 21% year over year with non-GAAP EPS of $1.41, both the CEO and CFO pointed to capacity expansion as the gating factor on exceptionally strong demand, and the company guided fiscal Q4 revenue to $1.91–$2.05B.
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Revenue reached $1.81B, up 21% year over year and up 27% year over year on a pro forma basis — an acceleration versus the prior quarter's growth rate. show quote
“Q3 REVENUE OF $1.81B, INCREASED 21% Y/Y AND 27% Y/Y ON A PRO FORMA BASIS”
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Profitability expanded alongside growth: GAAP gross margin was 37.7% with GAAP diluted EPS of $0.97, and non-GAAP gross margin was 39.6% with non-GAAP EPS of $1.41. show quote
“Revenue for the third quarter of fiscal 2026 was $1.81 billion, with GAAP gross margin of 37.7% and GAAP net income of $0.97 per diluted share. On a non-GAAP basis, gross margin was 39.6% with net income per diluted share of $1.41.”
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CEO Jim Anderson credited exceptionally strong datacenter and communications demand and said Coherent is rapidly expanding capacity as AI datacenter infrastructure scales. show quote
““We delivered another quarter of strong financial performance, with accelerating revenue growth, expanding margins, and improving profitability, driven by exceptionally strong demand across our datacenter and communications businesses,” said Jim Anderson, CEO. “As AI datacenter infrastructure continues to scale, we are rapidly expanding capacity to meet demand.”
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CFO Sherri Luther said revenue growth plus gross-margin expansion drove the year-over-year EPS increase, and that Coherent is ramping capital investment to add capacity given strong demand visibility. show quote
“Sherri Luther, CFO, said, “Significant revenue growth together with gross margin expansion drove a year-over-year increase in our GAAP and non-GAAP EPS. We remain focused on ramping our capital investment to drive increased capacity given our strong visibility into ongoing robust demand.””
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Guidance calls for fiscal Q4 2026 revenue of $1.91 billion to $2.05 billion — above the $1.81 billion just reported at both ends of the range. show quote
“Revenue for the fourth quarter of fiscal 2026 is expected to be between $1.91 billion and $2.05 billion.”
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From the call
On the call, management framed demand as both intensifying and lengthening — a step-function increase in the order book drove backlog to a record with orders reaching into calendar 2028 — anchored by the March NVIDIA CPO partnership ($2B equity investment plus a multiyear supply agreement) and an indium phosphide capacity doubling now running a quarter ahead of plan; CFO Sherri Luther said the NVIDIA investment lifted cash to $3B, funding the accelerating capex ramp.
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CEO James Robert Anderson said the order book took another step-function increase, driving backlog to a record, with orders now reaching into calendar 2028 and customer LTAs extending to the end of the decade. show quote
“This quarter, we experienced another step-function increase in our order book, driving our backlog to a record level. Customer demand remains exceptionally strong with no signs of attenuation, and our visibility continues to extend further into the future with orders now reaching into calendar 2028 and customer LTAs extending to the end of the decade.”
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Anderson detailed the March NVIDIA strategic partnership around CPO: a $2 billion equity investment in Coherent plus a multiyear supply agreement extending through the end of the decade. show quote
“In March, we announced a strategic partnership with NVIDIA focused on multiple CPO-related products and solutions. This partnership includes both NVIDIA's $2 billion equity investment in Coherent, Inc. and a multiyear supply agreement extending through the end of the decade.”
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Anderson said Coherent remains on track to double internal indium phosphide output capacity by the end of this calendar year — now one quarter earlier than originally planned. show quote
“We remain on track to achieve our goal of doubling internal indium phosphide output capacity by the end of this calendar year. Based on current execution, we now expect to reach that milestone one quarter earlier than originally planned.”
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CFO Sherri R. Luther said the cash balance doubled to $3 billion from $1.5 billion in the prior quarter, primarily on the $2 billion NVIDIA equity investment announced March 2, 2026. show quote
“Our cash balance increased to $3 billion from $1.5 billion in the prior quarter, primarily due to the $2 billion equity investment from NVIDIA that we announced on 03/02/2026.”
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as of 2026-08-10